Gold: Lustre is still hard to ignore – TD Securities


The global economy continues to slow and in response, investors have begun to heed the global slowdown, sending prices of safe haven assets sharply higher, dragging real yields sharply lower globally and sending investors into gold's warm embrace, according to analysis team at TD Securities.

Key Quotes

“As money managers incorporate the deteriorating macroeconomic signals into their expectations for equity earnings, the case for gold as a tail risk hedge is growing.”

“Considering gold as an equity hedge, ETF purchases have soared some 20% year-on-year, with the growth in holdings showing no sign of slowing down as of yet. In fact, the strength in gold's prices is entirely in line with the rise in investor demand based on a historical analysis of holdings, which provides little evidence that investment demand has peaked, as is suggested by other positioning metrics.”

“Aside from holding gold as an equity hedge, with a high proportion of real rates globally in negative territory, purchasing gold as an alternative to bonds is particularly attractive given the paradigm shift narrative, which argues that central bank policy is nearing its limits, opening the door to non-conventional policies which could be particularly accretive to gold prices.”

“We suspect that rising global risks will ultimately persuade a herd of money managers to diversify their assets in gold, which could argue for a substantial period of strengthening investor appetite for bullion diversifers. After all, an inverted yield curve and low real rates have driven opportunity costs for holding the yellow metal to multi-year lows.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD under pressure just above 1.1000

Despite easing demand for the greenback, the EUR/USD pair remained subdued, holding just above the 1.1000f figure. Speculative interest waiting for a catalyst.

 

EUR/USD News

GBP/USD surges on renewed Brexit hopes

The Sterling beat all of its rivals after Brexit Party’s leader, Nigel Farage, expressed support for Conservatives. Brexit deal coming post-elections?

GBP/USD News

USD/JPY trims losses, rises back above 109.00

The USD/JPY pair trimmed losses over the last hours amid a recovery of the US dollar and despite the decline in equity prices in Wall Street.

USD/JPY News

Gold rebounds from multi-month lows, trades around $1,455

After posting its largest weekly percentage drop of the year and erasing more than $50, the troy ounce of the precious metal remained under pressure on Monday with the XAU/USD pair slumping to its lowest level since early August at $1,452.

Gold News

Central bankers link the future to blockchain projects

The race towards the tokenization of sovereign currencies has begun a long time ago, but it finally enjoying its time in the sun. China has announced its intention to create an e-Yuan, and also in Europe, institutions are considering the matter.

Read more

Forex MAJORS

Cryptocurrencies

Signatures